VICI PROPERTIES INC. Q2 FY2025 earnings call

Ed Pitoniak discussed the importance of the dividend in total return, referencing Savita Subramanian's views on dividends contributing to total return. He mentioned VICI's total return components: dividend return, capitalization of same-store and new store earnings growth. The midpoint of 2025 AFFO per share guidance is 4.4% growth vs 2024. John Payne talked about VICI's disciplined portfolio and operating partners, mentioning investments in Red Rock Resorts, One Beverly Hills, and the long-term confidence in Las Vegas despite near-term moderation. He highlighted the quality of the existing portfolio and operators. David Kieske discussed the balance sheet, including bond offerings, equity ATM program, liquidity, leverage, and interest rates.

Raised 2025 AFFO guidance: AFFO for 2025 is expected to be between $2.5 billion and $2.52 billion, or $2.35 to $2.37 per diluted common share, up from prior guidance. The midpoint shows 4.4% growth in AFFO per share vs 2024.

Q: What drove the decision to increase mezzanine loan investment on One Beverly Hills?

A: Part of a larger $6-8 billion project, commitment may increase as construction financing progresses.

Q: Thoughts on iGaming proliferation?

A: Monitor, important for tenants' credit, regulators have decisions to make.

Q: Debt investments vs property investments?

A: Focus on capital cadence, credit opportunities more than real estate transactions currently.

Q: Transaction costs in the quarter?

A: Write-off of pursuit costs from prior quarters.

Q: Views on Las Vegas regional gaming markets?

A: Excited about industry, regional markets seeing uptick, diversified portfolio helps.

Q: Tax regulations and tenant investments?

A: Bonus depreciation benefits operators, encourages investment in properties.

Q: New York gaming licenses and participation?

A: Tenants have option to use VICI's financing, no restrictions.

Q: Canadian properties and outbound traffic?

A: Canadian operators seeing uptick, more Canadians staying home.

Q: Loan maturities and capital inflow?

A: Actively work with partners, evaluate reinvestment or refinancing options.

Q: iGaming impact on underwriting?

A: Factor in underwriting, monitor states with iGaming.

Q: Caesars Forum call option and Vegas land bank?

A: Assess optionality, land bank has value for future.

Q: Expanded funnel beyond gaming?

A: Theme parks, indoor water parks, sports, focus on growth-minded operators.

Q: Regional markets of interest?

A: Las Vegas, Reno, Virginia, etc.

Q: Lucky Strike sale-leaseback?

A: No impact, Lucky Strike continues to grow.

Q: Red Rock deal capital drawdown?

A: Initial $80M drawn, funding cadence continues, partnership with Red Rock.

Q: Bonus depreciation and investment shifts?

A: Planning based on benefits, capital investment to increase building value.

Q: Dividend composition and cash flow from debt vs equity?

A: Focus on growing AFFO per share to grow dividend, not decompose by source.